US hedge funds stampede out of China in Q2 (updated)

KE Holdings

14/08/2023 21:15

(Adds Tiger Global's positions in paragraph 2 and context)
    By Carolina Mandl
       NEW YORK, Aug 14 (Reuters) - U.S.-based hedge fund
investors including Coatue, D1 Capital and Tiger Global cut
their exposure to Chinese companies in the second quarter, as
the country's economic prospects seemed to wobble and
geopolitical tension increased.
    Tiger Global slashed its position in JD.com  9618.HK  by
roughly 12%, to $719.3 million from $1.1 billion, while also
reducing its numbers of shares in Kanzhun  2076.HK . 
    Coatue Management LLC, founded by Philippe Laffont, formerly
of Tiger Management, cut its positions in Alibaba  9988.HK ,
Baidu  9888.HK , JD.com, Kanzhun, KE Holdings  2423.HK , Li Auto
 2015.HK  and PDD Holdings  PDD.O , regulatory filings showed.
    The hedge fund slashed its position in Alibaba by roughly
90% from March to June, filings showed.
    D1 Capital Partners also dumped all its 1.7 million shares -
or $176.8 million - in Alibaba, according to documents.
    Louis Bacon's Moore Capital Management sold over $200
million in shares of Alibaba, exiting its position in the
company.
    Michael Burry's Scion Asset Management sold small positions
it had in both Alibaba and JD.com.
    The funds did not immediately respond to requests for
comment. 
    Every quarter, institutional investors have to disclose
their equity positions in so-called 13-F filings, but they do
not provide any explanation for the positioning changes.
    Although they are backward looking, many investors scour
them for trends.                 
    The changes came as hopes for a post-COVID surge in growth
deflated as data has showed an uneven recovery, while U.S.-China
geopolitical tensions also raised concern.
    Worries have heated up in recent days, as the country's
largest private real estate developer, Country Garden  2007.HK ,
seeks to delay payment on a private onshore bond.
    Meanwhile, last week U.S. President Joe Biden announced an
executive order to prohibit some U.S. technology investments in
China, sparking concerns among fund managers.
    Amid those uncertainties, China-focused mutual funds also
suffered a net outflow of $674 million in the second quarter.
    At the end of July, hedge funds' exposure to China was well
below five-year averages, Goldman Sachs showed.

 (Reporting by Carolina Mandl, in New York; Editing by Alison
Williams and Cynthia Osterman)
 ((carolina.mandl@thomsonreuters.com; +1 (917) 891-4931;))